Finnish ship and power plant engine maker Wartsila Oyj
Combining Hamworthy and Wartsila will allow both organisations to broaden and enhance their capabilities in rapidly evolving offshore (and) marine gas applications as well as (in the) environmental solutions markets, Wartsila said in a statement.
Watrsila, which had announced talks with Hamworthy last week, said the 825 pence-per-share cash offer, backed by the Hamworthy board, valued the British company at about 383 million pounds, net of share options in the target company.
This is the right strategic move for them. Offshore and gas are the sectors which will grow, said analyst Markus Liimatainen at Helsinki-based brokerage FIM.
The price is not too cheap when looking at the multiples, but it seems somebody else has been interested in them too. However, Wartsila can easily afford these type of takeovers with their balance.
The bid is pitched at a 14.3 times multiple on the basis of Hamworthy's enterprise value against core earnings in the last fiscal year.
Analyst Jari Harjunpaa at brokerage Ohman said he believed Wartsila would be able to reinforce its technology portfolio and create synergies by linking its service network with Hamworthy's offering.
Gordon Page, Hamworthy's non-executive chairman, said: The board believes this is an attractive offer for Hamworthy shareholders, reflecting the strengths of Hamworthy's global positions and its growth prospects.
Wartsila said the takeover was expected to close in the first quarter in 2012. The acquisition is subject to regulatory approvals in Germany and Norway.
In October, Wartsila reported a bigger-than-expected fall in third-quarter profit and sales as some deliveries were delayed to the current quarter.
Wartsila had sales last year of 4.5 billion euros (3.8 billion pounds), while Hamworthy achieved revenue of 182 million pounds in its most recent financial year ended in March.
Wartsila shares rose 1 percent to 20.87 euros by 0848 GMT on the Helsinki bourse while Hamworthy rose 1.9 percent to 825p in London.
Hamworthy was advised on the deal by Hawkpoint and Wartsila by UBS.
(Editing by Erica Billingham and David Holmes)